Advertising and Public Relations Priciples of Marketing by Philip Kotler and Gary Armstrong Chapter 15 Advertising and Public Relations PEARSON

Objective Outline Advertising 1 Setting Advertising Objectives Define the role of advertising in the promotion mix. 1 Setting Advertising Objectives Setting the Advertising Budget Developing Advertising Strategy Evaluating Advertising Effectiveness and the Return on Advertising Investment Other Advertising Considerations Describe the major decisions involved in developing an advertising program. 2

Objective Outline Public Relations The Role and Impact of PR 3 Define the role of PR in the promotion mix. 3 Major Public Relations Tools Explain how companies use PR to communicate with their publics. 4

Advertising Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Marketing management must make four important decisions when developing an advertising program: setting advertising objectives, setting the advertising budget, developing advertising strategy (message decisions and media decisions), and evaluating advertising campaigns.

Setting Advertising Objectives Informative advertising Persuasive advertising Comparative advertising It’s used heavily when introducing a new-product category. In this case, the objective is to build primary demand. It becomes more important as competition increases. Here, the company’s objective is to build selective demand. Some persuasive advertising has become comparative advertising (or attack advertising), in which a company directly or indirectly compares its brand with one or more other brands. An advertising objective is a specific communication task to be accomplished with specific target audience during a specific period of time. Advertising objectives can be classified by their primary purpose─to inform, persuade, or remind. Reminder advertising It is important for mature products; it helps to maintain customer relationships and keep consumers thinking about the product.

Setting the Advertising Budget After determining its advertising objectives, the company next sets its advertising budget─The dollars and other resources allocated to a product or a company advertising program─for each product. A brand’s advertising budget often depends on its stage in the product life cycle. New products typically need relatively large advertising budgets to build awareness and to gain consumer trial. Market share also impacts the amount of advertising needed: Because building the market or taking market share from competitors requires larger advertising spending than does simply maintaining current share, low-share brands usually need more advertising spending as a percentage of sales.

Developing Advertising Strategy Advertising strategy is the strategy by which the company accomplishes its advertising objectives. It consist of two major elements: creating advertising messages and selecting advertising media.

Creating the Advertising Message Slice of life Lifestyle Fantasy Mood or image Musical Personality symbol Technical expertise Scientific evidence Testimonial evidence or endorsement The first step in creating effective advertising messages is to plan a message strategy—the general message that will be communicated to consumers. Thus, developing an effective message strategy begins with identifying customer benefits that can be used as advertising appeals. The advertiser must next develop a compelling creative concept—or big idea—that will bring the message strategy to life in a distinctive and memorable way. Message Strategy If all this advertising clutter bothers some consumers, it also causes huge headaches for advertisers. Breaking Through the Clutter The approach, style, tone, words, and format used for executing an advertising message. Message Execution To break through the clutter, many marketers have subscribed to a new merging of advertising and entertainment, dubbed “Madison & Vine.” Madison & Vine is a term has come to represent the merging of advertising and entertainment in an effort to break through the clutter and create new avenues for reaching customers with more engaging messages. Merging Advertising and Entertainment Taking advantage of today’s interactive technologies, many companies are now tapping consumers for message ideas or actual ads. Consumer-Generated Messages

Selecting Advertising Media Reach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time. Frequency is a measure of how many times the average person in the target market is exposed to the message. The advertiser also must determine the desired media impact—the qualitative value of message exposure through a given medium. Determining Reach, Frequency, and Impact In selecting specific media vehicles, media planners must balance media costs against several media effectiveness factors. First, the planner should evaluate the media vehicle’s audience quality. Second, the media planner should consider audience engagement. Third, the planner should assess the vehicle’s editorial quality. Selecting Specific Media Vehicles The major steps in advertising media selection are (1) determining on reach, frequency, and impact; (2) choosing among major media types; (3) selecting specific media vehicles; and (4) choosing media timing. An advertiser must also decide how to schedule the advertising over the course of a year. Most firms do some seasonal advertising. Finally, the advertiser must choose the pattern of the ads. Continuity means scheduling ads evenly within a given period. Pulsing means scheduling ads unevenly over a given time period. Deciding on Media Timing The major media types are television, the Internet, newspapers, direct mail, magazines, radio, and outdoor. Choosing among Major Media Types

Evaluating Advertising Effectiveness and the Return on Advertising Investment Return on advertising investment is the net return on advertising investment divided by the costs of the advertising investment. Measuring the communication effects of an ad or ad campaign tells whether the ads and media are communicating the ad message well. Advertisers have gotten pretty good at measuring the communication effects of their ads and ad campaigns. However, sales and profit effects of advertising are often much harder to measure.

Other Advertising Considerations In developing advertising strategies and programs, the company must address two additional questions. How will the company organize its advertising function—who will perform which advertising tasks? How will the company adapt its advertising strategies and programs to the complexities of international markets?

Organizing for Advertising Advertising agency is a marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs. Most large advertising agencies have the staff and resources to handle all phases of an advertising campaign for their clients, from creating a marketing plan to developing ad campaigns and preparing, placing, and evaluating ads and other brand content.

International Advertising Decisions The most basic issue concerns the degree to which global advertising should be adapted to the unique characteristics of various country markets. In recent years, the increased popularity of online social networks and video sharing has boosted the need for advertising standardization for global brands. Standardization produces many benefits—lower advertising costs, greater global advertising coordination, and a more consistent worldwide image. But it also has drawbacks. Most importantly, it ignores the fact that country markets differ greatly in their cultures, demographics, and economic conditions.

International Advertising Decisions Special problems Advertising media costs and availability differ vastly from country to country. Many countries have extensive systems of laws restricting how much a company can spend on advertising, the media used, the nature of advertising claims, and other aspects of the advertising program. Thus, although advertisers may develop global strategies to guide their overall advertising efforts, specific advertising programs must usually be adapted to meet local cultures and customs, media characteristics, and regulations.

Press relations or press agency Public Relations Press relations or press agency Creating and placing newsworthy information in the news media to attract attention to a person, product, or service. Product publicity Publicizing specific products. Public affairs Building and maintaining national or local community relationships. Lobbying Building and maintaining relationships with legislators and government officials to influence legislation and regulation. Public relations (PR) build good relations with the company’s various publics by obtaining favorable publicity; build up a good corporate image; and handle or head off unfavorable rumors, stories, and events. PR departments may perform any or all of the following functions: Investor relations Maintaining relationships with shareholders and others in the financial community. Development Working with donors or members of nonprofit organizations to gain financial or volunteer support.

The Role and Impact of PR Public relations can have a strong impact on public awareness at a much lower cost than advertising can. Rather, it pays for a staff to develop and circulate information and manage events. Despite its potential strengths, public relations is occasionally described as a marketing stepchild because of its sometimes limited and scattered use. The point is that PR should work hand in hand with advertising within an integrated marketing communications program to help build brands and customer relationships.

Major Public Relations Tools PR Tools News Special events Written materials Audiovisual materials Corporate identity materials Public service activities

The End